When, in your 2005 referendum, 62 per cent of Dutch voters rejected the European Constitution, they were not voting against international collaboration. The Dutch people were voting, as we would have done, against a Brussels system that had become meddlesome, arrogant and remote.

That attitude has turned a majority of British people against the EU. While we want trade and co-operation with our neighbours, we don’t want to be part of a European state that keeps extending its powers.

The mainstream majority in Britain is happy for the EU to have power over essentially international issues, such as cross-border pollution. What they resent is the power of Brussels officials in essentially domestic matters. Can we buy by the pound or by the pint? Until what age should our children need car seats? Which mineral supplements and herbal remedies can we take? How often should recycling be collected?

But free trade doesn’t require merged institutions. No one argues that we must join in a political union with Brazil in order to sell to Brazil. And so let it be with the EU. We should be allies, friends, trading partners; but not subjects.

Why am I saying these things now? Why, nearly three years after I became Prime Minister, have I picked this moment to renegotiate Britain’s relations with the EU? Because the agony of the euro is altering the terms of our association. The European structures of which we have been members for 40 years are, in practical if not legal terms, ceasing to exist.

Eurozone leaders have made clear how they intend to respond to the crisis in monetary union: with tax harmonisation, eurobonds, a common finance minister and, logically, a federal government to oversee these things. Since almost no one is suggesting that Britain join the single currency, the question arises: what kind of relationship will we have with this new entity? Can we remain within a free trade area without being part of the associated governmental union?

I believe we can. But having an economic rather than political relationship with the EU will require us to repatriate substantial powers. We have already announced that we will opt out, en bloc, from 130 common policies in the field of justice and home affairs. That is a precedent on which more can be built.

I want Britain to have an independent foreign policy. We might share diplomatic and defence capabilities with our European allies, just as we do with our Commonwealth allies. But we shall do so as one nation dealing with another, rather than as part of a common European foreign policy.

When people are struggling with the cost of living, I am not prepared to ask British consumers to subsidise continental farmers. The Common Agricultural Policy punishes us twice over, as a net food importer with relatively efficient producers. I want a British farming policy, designed for our own countryside.

The Common Fisheries Policy has wrecked what ought to be a great British renewable resource. I want us to manage our own fish stocks, out to 200 miles or the median line between our shores and those of other nations, as allowed under maritime law.

I want us to control our social and employment policy, including the right to work for whomever we please, and for whatever hours we agree.

I want us to reassume control over regional policy, taxation, culture, immigration.

I want UK law to have primacy within the territory of the United Kingdom, with EU directives being treated as no more than advisory pending a specific decision by our Parliament on what should and should not be implemented.

And, while we should be full participants in the European market, I want us to be able to sign trade deals with non-EU states, as Norway and Switzerland can.

Swiss exporters must, of course, meet EU standards when selling to the EU, but are generally not required to apply those regulations to their domestic trade. Last year, in proportionate terms, they exported more than four times as much to the EU as Britain did.

Oh, and while we’re on the subject — not that this one is a deal-breaker — we’d like our stiff blue passports back.

The former president of the European Commission, Jacques Delors, has called for Britain to be given what he calls a ‘privileged partnership’, envisaged as a kind of enhanced free trade relationship. The Union of European Federalists prefers the term ‘Associate Membership’.

Whatever name you call it by, I believe there may well be other EU member states interested in a similar deal, as might Balkan countries, Turkey and others.

It is possible to imagine a pan-continental market, encompassing perhaps 35 or 40 states, and stretching from Iceland and the Faroes to Turkey and Georgia. Within that free trade zone, a smaller number of member states would be free to pursue their federal ambitions with the friendship and encouragement of their neighbours.

Potentially, all sides would be more content. The United Kingdom’s veto on EU treaty changes would be lifted. British MEPs and officials would be removed.

I am confident that, if such a proposition, or one close to it, were put to the British people, they would support it overwhelmingly.

But that won’t be up to me, or to any other politician. The British people as a whole must decide whether the new terms are acceptable. That’s why I am announcing today that there will be a referendum before the end of 2016 on whether Britain should remain in the EU.

Because I know that all parties have lost credibility on this issue, I intend to make Government time for a Bill in this Parliament setting the date.

I hope the other parties will support it: our Liberal Democrat coalition partners promised to do so at the last election. But, if the Bill fails to get a majority, people will see which MPs went through which lobbies, and will be able to vote accordingly in the 2015 general election.

I am today issuing a plea to all those who want Britain to remain in the EU: to pro-European MPs in all three parties; to friendly EU governments; and, not least, to our own Brussels officials. Help me to secure a deal that I can, in good conscience, recommend to the British people.

If such a deal cannot be reached, we will instead seek our objectives from the outside, giving notice of our withdrawal and activating Article 50 of the Lisbon Treaty, which requires the EU to negotiate a trade deal with a departing member.

An amicable divorce is not my preferred option. But it shouldn’t alarm our partners with whom, whether as associate members of the EU, or as non-members on the Swiss model, we will retain the friendliest relations.

Nor should it frighten anyone in Britain. We are the seventh largest economy in the world, one of five permanent seat-holders on the UN Security Council, and a member of the G8. Our language is considered the most widely used on Earth, our Armed Forces the fourth most powerful on the planet.

I have set out my bottom line. We can be good friends and good customers. But we won’t compromise our democracy or bargain with our independence. If necessary, we will stand alone in Europe. It wouldn’t be the first time.

The author is Daniel Hannan, MEP for South East England. This article was originally produced on the Daily Mail’s website.